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First Brexit… then Trump… Now, it’s time for Pro

Is your portfolio really prepared for what’s coming next?

To help investors like you navigate this historically uncertain — yet high-flying — market and prepare for an inevitable downturn, we’re re-opening our Motley Fool Pro Canada service to a select few new members for a short time.

To discover how Pro Canada could help you to increase your upside potential… reduce your downside risk… and earn paycheque-like income in the process, simply click here — before the small number of spots we have left are all gone!

Why Restaurant Brands International Inc. Should Be a Core Holding

Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) has been on an amazing run over the last year and is now up nearly 45%. The business is misunderstood by most investors who don’t realize how much value will be unlocked for shareholders over the course of the long term.

Sure, there’s a lot of debt, and the amount of debt a company has is important when considering whether or not to invest in a company, but what many investors don’t realize is that Restaurant Brands is growing its free cash flow like there’s no tomorrow. If the company keeps growing its free cash flow at this rate, it will have zero problems paying back its debt.

The incredible management team, 3G Capital, is worth every cent of the premium price that the stock may have over peers. 3G Capital is an industry expert which knows the ins and outs of the quick-service restaurant business. Burger King is an international success, and Tim Hortons as well as Popeyes Louisiana Kitchen will soon to follow in Burger King’s footsteps.

The average investor probably can’t fathom the amount of growth potential Restaurant Brands is capable of. As the name implies, Restaurant Brands is likely to acquire many more fast-food chains down the road. The management team will repeat its proven expansion and same-store sales growth strategy and drive cash flow.

Sure, the stock isn’t cheap based on traditional valuation metrics, but if you consider the growth potential, I actually think the stock is undervalued at current levels. I believe there’s a lot more upside from here, despite what many analysts have been saying about the valuation and the debt levels.

The company is backed by Warren Buffett. There’s a reason why he loves 3G Capital and the businesses it runs. It’s one of the best management teams in the world at driving long-term value for shareholders through strategic expansion, same-store sales growth initiatives, cost cutting, strategic acquisitions, and the synergies unlocked from such acquisitions. If Restaurant Brands ever needs a bit more cash to make a massive acquisition, Uncle Warren will probably be there answer the call.

Fool contributor Will Ashworth recently referred to 3G Capital as an “evil empire” and stated that it turned the great Canadian brand, Tim Hortons, into “another [one] of 3G Capital’s many moneymakers.” I don’t know about you, but I find myself drawn to Tim Hortons because of the new menu items and value-conscious choices like Perfect Pairings.

This great brand turned into a brand that is beyond incredible thanks to the geniuses at 3G Capital. Canadians clearly love the brand more than ever before, and that’s a big reason why Tim Hortons is seeing a huge amount of same-store sales growth on a consistent basis across Canada and in other places around the world.

I believe 3G Capital is the benchmark for managerial excellence, and you can bet that it’ll have more tricks up its sleeves to deliver fantastic results for 2017 and many years down the road.

Six "pro" strategies for today's highly uncertain market

Motley Fool Canada's $250,000-real-money-portfolio service, Motley Fool Pro, is currently closed to new members. But lead advisor Jim Gilles is doing something special for investors who are worried about the market and where it will head in 2017.

He's revealing the six strategies he uses in Pro to help members guardrail their portfolios and make money in up, down, and sideways markets.

For a limited time you can download this "Pro 2017 Survival Guide" free of charge by simply clicking here.

Fool contributor Joey Frenette owns shares of Restaurant Brands International Inc. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC.

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

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